Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

BofA, Morgan Stanley Gain as Geithner Says Banks Stronger

The Bank of America Corp. logo is displayed in front of a branch in Galveston, Texas. Photographer: Scott Eells/Bloomberg
The Bank of America Corp. logo is displayed in front of a branch in Galveston, Texas. Photographer: Scott Eells/Bloomberg

Oct. 6 (Bloomberg) -- Bank of America Corp. and Morgan Stanley led U.S. banks higher in New York trading after Treasury Secretary Timothy F. Geithner said the nation’s financial firms have strengthened and there is “absolutely” no chance of another collapsing like Lehman Brothers Holdings Inc. in 2008.

Bank of America climbed 8.8 percent to $6.28 and Morgan Stanley rose 4.8 percent to $15.18 at the 4 p.m. close of New York Stock Exchange composite trading. The KBW Bank Index of 24 financial stocks advanced 4.6 percent. The cost to protect debt of Bank of America, Citigroup Inc. and Morgan Stanley also dropped.

U.S. banking stocks pared losses as optimism grew that Europe’s leaders may be able to prevent a sovereign debt crisis, curbing concerns that the lenders’ balance sheets would weaken. Geithner, testifying today before the Senate Banking Committee in Washington, didn’t mention any banks by name when responding to a question about Morgan Stanley.

“The direct exposure of the U.S. financial system to the countries under the most pressure in Europe is very modest,” he said. “Our firms, and this is true across the largest institutions in the United States, again are in a much stronger position if you look at their capital levels, levels of leverage, how they’re funded.”

Morgan Stanley, based in New York, is down 44 percent this year in New York trading. Bank of America, based in Charlotte, North Carolina, has dropped 53 percent, while New York-based Citigroup lost 45 percent.

Credit-default swaps on the biggest U.S. lender declined 12.6 basis points to 404.6 and those on Morgan Stanley, the world’s largest retail brokerage, dropped 22 basis points to 472.6, according to data provider CMA. Citigroup prices shed 11 basis points to 306.4, the data show.

To contact the reporter on this story: Michael J. Moore in New York at mmoore55@bloomberg.net

To contact the editor responsible for this story: David Scheer at dscheer@bloomberg.net

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.